Real Estate
Mortgage amortization schedule: how to read it
Understand each schedule column and why the interest share is largest near the beginning of a fixed-payment mortgage.
An amortization schedule separates each payment into principal and interest and shows the remaining balance.
For $2,000,000 at 9% over 20 years:
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $17,994.52 | $2,994.52 | $15,000.00 | $1,997,005.48 |
| 2 | $17,994.52 | $3,016.98 | $14,977.54 | $1,993,988.50 |
| 3 | $17,994.52 | $3,039.61 | $14,954.91 | $1,990,948.90 |
First-month interest is $2,000,000 x 0.0075 = $15,000. As principal falls, interest falls and more of the level payment reduces the balance.
Use a schedule to compare terms, verify extra payments and identify total interest. Insurance and other charges belong in separate columns. Generate and export the complete schedule with the mortgage calculator.